Court of Appeal Upholds Purchase Money Resulting Trust Decision

Ontario's Court of Appeal (“COA”) recently released a decision clarifying the legal requirements for finding a purchase money resulting trust.  The COA upheld the trial judge's decision and dismissed the appeal on several grounds.

The Appellant sought to appeal the trial judge's finding that his mother's estate held a 26% beneficial interest in a property his corporation owned.  In 1980, the Appellant purchased a home for $38,500.  He made a down payment of $8,000 and his mother, Violet, contributed $10,000 towards the purchase price.  The Appellant financed the outstanding balance through a mortgage and covered most of those costs.  The Appellant's position was that Violet loaned him the funds and he paid her back within a year.  However, the trial judge found that Violet had contributed to the purchase price of the house and her estate now held a 26% interest in the house.  The $10,000 sum was not a loan to her son but Violet intended to gain an equity share in the property when she contributed the $10,000. The Appellant appealed the trial judge's decision on several grounds.